Economist to Helena: Ride the ‘sea change' in Western economy

By Jason Mohr - IR Staff Writer - 08/17/05

The Rocky Mountain West will continue to prosper, and Helena would be well advised to hitch a ride, a state economist said Tuesday. Economist Larry Swanson delivered a whip-cracking message to about 70 business and community leaders at the Helena Regional Airport Tuesday.

Swanson, perhaps the state's leading economist and head of the University of Montana's Center for the Rocky Mountain West, kicked off a day's worth of discussion at the Community Leadership Institute 2005. The institute was sponsored by the Helena Education Foundation and the Gateway Economic Development Corp.

As the economy transitions from a natural resource-based economy to a human resource-based one, Helena ought to ride the "sea change" and reap the benefits, Swanson said. Helena would do well to think of itself as part of the Rocky Mountain West economy — or "Third Coast" — and not Montana's economy.

"We pretend we are a rural state," he said. "We pretend we're cowboys. If you think like cowboys, you're not going to be able to plan for change on the Third Coast."

A first wave of migration is over, Swanson said, with a second on its way. If trends continue, he estimated the Helena area could grow by 19,000 by 2015.

"Baby Boomers" have taken advantage of a "footloose" economy and moved from places like California and Colorado to Montana, Swanson said. Keeping their kids from leaving for jobs is perhaps one of Helena's biggest challenges.

That comes from creating a quality workforce and quality amenities — and having everybody at the table, Swanson said. Improvements or workforce development cannot be done "on the cheap," he said.

In addition, the environment is the magnet, not the enemy of the economy.

"It's all about mountains and wide-open spaces," Swanson said. "Helena has a freightload of amenities to work with."

Contrary to press reports and the statewide picture, Helena's economy is bullish, Swanson said.

Per capita income has increased locally, he said. Elsewhere, incomes are sagging in rural areas, eastern Montana and Indian reservations.

"While we want to think we're one of the poorest places on the planet — we're not," he said.

Local officials added their ideas of the future.

City-County health officer Joan Miles offered a cautionary tale, saying many of the area's poor and vulnerable are a step away from homelessness.

Thirty percent of area households earn less than $25,000, and working one's way up the job ladder is harder than before, she said. Miles was named state director of the Department of Health and Human Services, a position she will assume next month.

City and county officials say they're ready for growth.

The city is using only about half of its wastewater treatment plant, and water treatment capacity should be boosted by about that much, according to Helena Public Works Director John Rundquist.

The system should be able to handle anticipated influx, he said. The city of Helena has about 10,000 existing water and sewer connections, with about 8,000 homes and commercial lots on the drawing board, Rundquist said.

County Administrator Ron Alles said the city and county want to extend sewer lines into the valley, to relieve outdated septic systems.

Swanson said as personal computers dominate the workplace, jobs, people and income are free to move around, he said, part of what he called a "footloose" economy.

"More and more, people and businesses can be where they want," Swanson said. Taxes have actually dropped as a percentage of income. More and more people are relying on investment earning and other income, rather than a paycheck.

And it's all about services, Swanson said.

The service industry was once derided as flipping burgers, but today means college-educated jobs in health care, business services, financial planning, real estate and insurance. Locally, private employment should continue to outpace state government jobs, which is good, he said.

Meanwhile, traditional industries — like mining, oil and farming — aren't doing well, Swanson said.

Reporter Jason Mohr can be reached at 447-4075 or jason.mohr@helenair.com.

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